What is the origin of the $5 billion summit to buy AK112?

On December 6, 2022, Akeso announced its partnership with Summit Therapeutics entered into a partnership agreement to acquire interests in Akeso's PD-1/VEGF bispecific AK112 in the United States, Canada, Europe, Canada and Japan, with Summit paying an upfront payment of $500 million and a total transaction value of up to $5 billion, including development, registration, and commercialization milestones
.

As soon as the news came out, it attracted the attention of the entire industry, and it was accompanied by a heated discussion about why a company with a market capitalization of only $158 million and only $120 million in cash on the books signed such a large transaction
.

Although Summit is small and unknown, its CEO and largest shareholder, Robert W.
Duggan (81% of the common stock) is a legend in the biomedical industry
.

Robert W.
Duggan was CEO and largest shareholder of Pharmacyclics from 2008-2015, and the turning point in Pharmacyclics' success was the introduction of the BTK inhibitor irutinib
from Celera in 2006.
At that time, the main direction of irutinib was autoimmunity, and Pharmacyclics was still a company
hovering on the line of life and death.
The then CEO of Pharmacyclics was Richard Miller, it was Miller who discovered irutinib and recognized its potential value in treating hematological tumors, which led to the introduction of the product
.
However, in the early development of due to animal models and other problems, irutinib did not go smoothly and was constantly overwhelmed
because of burning money.
Duggan, a strong believer in the value of irutinib, continued to invest to become Pharmacyclics' largest shareholder (20% in a cumulative investment of $43 million) and became CEO
himself in 2008.
After the disclosure of Phase I clinical data in 2009, Pharmacyclics was on track, partnering with Johnson & Johnson in 2011 and being acquired
by AbbVie for $21 billion in 2015.
Duggan emerged as the biggest winner, with billions of dollars
in returns from a $43 million investment.
Irutinib has been singing all the way after its listing, with sales of $9.
8 billion
in 2021.

After Pharmacyclics was acquired in 2015, Duggan created his own personal investment fund
.
At the end of 2019, Duggan joined Summit and acquired more than 69% of Summit in April 2020, and began to serve as CEO, and the management team also recruited many of Pharmacyclics' original team, such as co-CEO and President Maky Zanganeh is Betty, former COO of Pharmacyclics and head of oncology/inflammation research and development Chang is Fong, former head of research and development and head of biostatistics and clinical operations at Pharmacyclics Clow is the head of biostatistics at Pharmacyclics, and Urte Gayko, head of registration, is the former head of registration and clinical at Pharmacyclics, Danelle James is the former global clinical lead for irutinib at Pharmacyclics, among others
.
Summit is small, but Duggan has built a stable and strong executive team
.

Summit, a company founded in 2003, worked to develop new antibiotics against Clostridium difficile, but the clinical progress was not smooth, and it has been hovering
on the line of life and death for a long time.
Most recently, in August 2022, Summit completed another $100 million additional financing, again funded by Duggan
.
However, judging from this cooperation with Akeso, Duggan has not expected much from Summit's own pipeline, and a strong executive team needs new potential blockbuster products
.

Going back to Summit's partnership with Akeso, Duggan, as Summit's largest shareholder, is more of a private company
.
The announcement of the partnership agreement coincided with Summit announcing that it would raise an additional $500 million, as well as major shareholder Duggan and second shareholder Maky Zanganeh (CO-CEO and President of the Company) has said that he will participate in the additional financing and said that he has at least subscribed for basic subscription rights, but has not yet signed a formal commitment letter
.
At the same time, Summit issued $520 million of unsecured notes to Duggan and MakyZanganeh, with Duggan paying $500 million, of which $400 million was cashed out by February 15, 2023, $100 million by September 15, 2023, and Zanganeh cashed out $20 million by February 15
, 2023 。 In short, Duggan first acquired Summit personally, and then continued to personally fund Summit to raise shares to buy AK112, the previous about 200 million US dollars, plus this time 500 million US dollars, the investment has reached 700 million US dollars, the core pipeline has also become AK112
.

summary